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Top 5 Things to Know in the Market on Friday

EconomySep 27, 2019 06:46
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Investing.com -- Flopping IPOs, paradise postponed for chipmakers and Delta is spreading its wings in South America. Meanwhile, the euro hits a new two-year low against the dollar and the Trump impeachment process continues to cast a long shadow. Here's what you need to know in financial markets on Friday, 27th September.

1. Endeavor pulls IPO, Peloton (NASDAQ:PTON) flops, We Company cuts

The IPO market is showing increasing signs of stress after talent agency Endeavor Group pulled its prospective deal, while Peloton (NASDAQ:PTON), the maker of high-end exercise equipment, fell 11% on its debut.

Elsewhere, We Company started to address the bloated cost structure that scared investors off its proposed deal last week. According to the Wall Street Journal, it’s not only considering job cuts at its operating company WeWork, it’s also – gasp! – going to sell the Gulfstream private jet of founder Adam Neumann, who was ousted as chief executive earlier this week.

2. Trump’s whistleblower travails

President Donald Trump threatened retribution against the whistleblower whose report was released Thursday by the House Intelligence Committee. Trump branded the whistleblower, who has been identified as a CIA agent seconded to the White House as “a kind of spy” in a closed-door meeting reported by Bloomberg.

Markets remain unsure how to react to the impeachment process which was launched by House Speaker Nancy Pelosi earlier this week. The Congressional arithmetic suggests that Trump should easily resist impeachment in the Senate, which is controlled by his party.

However, doubts about the willingness of the Republican Party to stick by Trump are circulating. George Conway, husband of White House strategist Kellyanne Conway, tweeted Thursday: "There may be Republican senators who won’t say a word until the moment they say “guilty” when the roll is called at the end of an impeachment trial."

3. Wall Street set for modest bounce

U.S. stock markets are set to open a little higher, recouping some of the losses caused by political concerns on Thursday.

By 6 AM ET, Dow futures, the S&P 500 futures contract and Nasdaq 100 futures were all up 0.2%. That leaves them on course for a loss of between 0.8% and 1.2% in a week where there hasn’t been enough encouraging news on the trade front to offset increasing concern about the U.S. domestic political outlook.

Chipmaker stocks may be set for a rocky opening after weak guidance from Micron Technology (NASDAQ:MU) late Thursday caused it to slide 7% in after-hours trading.

Delta Air Lines (NYSE:DAL) will also be in focus, after it said it will buy 20% of LATAM Airlines (NYSE:LTM) Airlines to expand its presence in Latin America. It’s paying $1.9 billion up front and will also invest $350 million “to support the establishment of the strategic partnership,” notably through the purchase of Airbus A350 aircraft.

4. Europe’s economy goes from bad to worse

The euro and sterling continue to slide against the dollar, as the risk of a disorderly Brexit re-emerges and short-term data continue to show a slowdown with no end in sight.

The pound fell Friday morning in Europe after Michael Saunders, seen as the biggest hawk on the Bank of England’s Monetary Policy Council, said persistently high uncertainty warranted lower interest rates – if the U.K. can avoid a no-deal Brexit.

The euro, meanwhile, continued to be depressed by weak business confidence surveys from Italy and Spain, while disappointment over the lack of fiscal stimulus from Germany is overshadowing tax cuts from France in its 2020 budget. It hit a new two-year low against the dollar of $1.0905 overnight.

5. Can U.S. data paint a brighter picture?

Another raft of domestic economic data over the course of the day will show how successful the U.S. economy has been in disconnecting itself from a global slowdown.

Durable goods orders and personal consumer expenditures for August will be released at 8:30 AM ET (1230 GMT), while the University of Michigan will give its final reading for consumer sentiment in September.

Baker Hughes will say at 1 PM ET whether there’s any turnaround in oil drilling across the U.S. Last week’s figures showed the lowest number of active oil rigs in over two years.

Top 5 Things to Know in the Market on Friday
 

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